Talking about big market trends Sachin Shah, Executive Director & Fund Manager, Emkay Investment Managers Said that consolidation continues in the market. This consolidation has been going on since the last quarter. There has been a decline in most of the indices from October to December. Many reasons are being given for this decline. But we should also keep in mind that in the last 3 years the market has given 20-25 percent returns annually. In such a situation, after such a surge, it is natural to see profit booking or consolidation.
He further said that the current correction in the market is a good opportunity for long-term investors to buy good stocks. Because the long term outlook of the market remains good. He further said that as of today there are 3-4 sectors where both valuation and outlook are quite good. But we have to take a long view of investment. That means investment will have to be made with a perspective of at least 3-4 years. The first sector among these is private banks. The valuations here are very good. Their growth is also expected to be good in the next 2-3 years. There is a good opportunity to invest in leaders of private sector banks.
Sachin also sees good investment opportunities in the IT sector from a long term perspective. Indian IT companies will benefit greatly from the US economic recovery. Many Fortune 500 companies of America had put their IT spending on hold for a long time. But with the recovery in the US economy, Indian IT companies will see big orders from America.
Experts views: The overall trend of the market is bearish, advice is being given to sell on upswing.
Sachin’s third favorite sector is Pharma. Even in pharma, they are liking companies in CDMO space more. These companies are expected to benefit greatly from the China Plus One policy. Sachin is also liking auto companies. Sachin says that at present the valuation of the leaders of the auto sector is quite good. Investing in these for the next 3-4 years can yield good profits.
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